Australia threatens telcos with mobile roaming price laws

Roaming profit margins fall from 1000% to 300% but governments want more

Common Topics

Australia and New Zealand are considering legislation to prevent mobile carriers gouging customers when they use their phones overseas.

Australia's Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, and New Zealand's Minister for Communications and Information Technology Amy Adams MP (not the actress), today jointly launched a draft paper (DOCX from Australia) on roaming charges, based on traffic and revenue information provided by the two nations' mobile operators for the calendar years 2009-2011, as well as an expert study prepared by the consultancy firm WIK-Consult (PDF from New Zealand).

The nations have collaborated on the project because of close ties and high volumes of people travelling between the two. The two governments are willing to make identical responses to the issue and believe a bilateral approach will be easier to achieve than deals with many other nations around the globe.

Conroy has conducted a media blitz to publicise the launch of the paper, telling multiple news outlets it's a necessary action because mobile carriers' response to past expressions of concern by government have seen them reduce roaming profit margins of 1000 per cent to a mere 300 per cent. That fall is appreciated, but leaves plenty of antipodeans with nasty bills.

The draft paper therefore suggests that telcos reduce prices further, to assuage consumer resentment, or face a regulatory stick that would mean “operators would likely feel constrained in their ability to set unreasonable terms of supply and, to the extent they did not, the regulators could intervene effectively.”

For now, both nations want their mobile carriers to get cracking on a regime that would send TXT messages advising of roaming charges, along with an opt-out-from-roaming option, to their customers as soon as they touch down in a foreign land.

If telcos don't do so in good faith across Australia and New Zealand, the regulatory option remains open to both governments.

While many Australians undoubtedly experience bill shock on their return from overseas, its also worth noting that Conroy has form telco-bashing as a tactic to show he's standing up for the little guy.

The Minister has often castigated telcos for poor customer service, quoting raw numbers of complaints and deeming them unacceptable without reference to benchmarks or calculating the ratio of satisfied to unsatisfied customers.

Such criticism is not levelled at other industries by Ministers in other portfolios.

The telecoms industry may also have been targeted for political advantage in the past: former Australian Communications Minister Helen Coonan is said to have whispered, off the record, that Australia's introduction of a Do Not Call Register was a political sop for disgruntled consumers rather than a necessary reform.

That argument probably can't be made against high roaming charges. But with Australia's former treasury secretary Ken Henry this week saying some Australians who visit Bali aren't aware it is in Indonesia, surely the principle of buyer beware applies to those who take their phones abroad.

If you agree with that argument, or have another point to make, comments on the report are welcome until September 27th, here. ®